Merger and acquisition activity has grown in importance within the global gambling industry. Many big industry-involved brands already made this step, while others are on the verge of making it. News emerged on Thursday that casino operator Caesars Entertainment Corp is making a play to welcome casino operator Centaur in an acquisition deal. Caesars seeks to broaden its reach and crack into Indiana’s gaming industry. The company has agreed to pay $1.7 billion in cash for the Indianapolis-based casino and horse racing company Centaur Holdings LLC. The announcement came shortly after Caesars’ main operating company Caesars Entertainment Operating Co Inc emerged from a 3-year long bankruptcy.
The Nevada-headquartered operator is set to pay the amount of $1.7 billion for the new addition to its family. The payment is to include a cash consideration of $1.63 billion at closing and $75 million in deferred consideration. Industry insiders explained that Caesars has made one more step toward further bolstering its presence on the US gambling market. This takeover is the most recent in the surge of consolidation activities across the UK gaming sector. It is also an important move by Caesars, which faced bankruptcy due to billions in debt. It is projected that the operator is to enjoy a massive pretax profit on the deal.
According to Caesars, Centaur has a solid customer base of more than 6.5 million players. Apart from that, the Centaur Holdings has a strong loyal program with 1.1 million members being subscribed to it. The deal is expected to close by June 2018, currently pending necessary regulatory approvals.
Under the acquisition deal, Caesars is to assume control over Hoosier Park Racing & Casino and Indiana Grand Racing & Casino. The two gambling properties feature over 2,000 slot machines, table games and horse racing tracks. As for non-gambling activities, both venues offer exclusive dining areas and bars to capitalize on the opportunity to attract guests with various interests. At present, Caesars owns two gambling properties in Indiana, including the Horseshoe Hammond and the Horseshoe Southern Indiana.
Joint Venture between Caesars and Centaur to Enhance Their Positions
As it can be recalled, Centaur announced its plan to pursue acquisition offers in order to stabilize from the continuous free fall of its gambling revenue. It is interesting to note that Centaur is not the only casino operator to see its gambling revenue plummets. The reason for the considerable slump is the over-saturated market, which fails to attract a new generation of players.
Many companies joined forces in an attempt to establish one player-friendly gaming environment and fortify their positions on the market. This acquisition deal is also of high importance to the once-embattled Caesars, which hit the bottom only 3 years ago. At present, the operator managed to climb out of the hole and finally find its feet. Mere days ago, Caesars soared on the news once again after it became clear that the company is squaring up to crack into Japan’s gaming industry.